Priority Personnel Blog

What Employee Turnover Really Costs Your Company

December 13th, 2011

Many surveys say that the number one issue facing businesses today is finding and keeping good employees. That’s partially because nationally, the average annual employee turnover rate is 14.4 percent – and it can cost companies thousands or even millions of dollars a year.

While companies normally record and report costs such as wages and benefits, workman’s compensation insurance, utilities, materials and space, most companies don’t track and report the cost of employee turnover.

How to Estimate Turnover Costs

  • SHRM, the Society for Human Resource Management, once estimated that it costs $3,500.00 to replace one $8.00 per hour employee when all costs — recruiting, interviewing, hiring, training, reduced productivity, etc., were considered. But SHRM’s estimate was the lowest of 17 nationally respected companies who calculate this cost!
  • Do a quick calculation: Think of a job in your organization that has experienced high turnover, maybe supervisors. Estimate their annual average pay and the number of supervisors you lose annually. If their average annual pay is $40,000, multiply this by 1.25 (125% of their annual pay). The result? It costs $50,000 to replace just one supervisor. If you lose ten supervisors a year, you’re spending $500,000 in replacement costs just for supervisors.

Do These Numbers Seem Unbelievable?

Actual turnover costs are usually much higher than we think they are.

If you want to find out exactly how much turnover is costing your organization, find an online employee turnover calculator. Just remember that only tangible costs can be calculated on these sites. Intangible costs are just as real and sometimes much greater than quantifiable costs, but they are difficult if not impossible to measure.

Why Don’t More Companies See This as a Costly Problem?

Many companies don’t realize the true cost of turnover, which costs companies in both expertise and dollars, because they have never examined it. Here are four possible reasons:

1. No process is in place to tabulate the costs of turnover.

2. If they are measured, those costs are not reported to top management.

3. Employers think it’s an inescapable cost of doing business — but it’s not!

4. Costs are underestimated, so they don’t cause concern.

How Can You Measure Turnover Costs in Your Organization?

A comprehensive program measures the following costs:

  • · Separation costs
  • · Replacement costs
  • · Training costs
  • · Vacancy costs

Separation costs include:

  • administrative functions related to termination
  • separation/severance pay
  • any increase in unemployment compensation.

Replacement costs include the cost of:

  • attracting applicants
  • interviews
  • preemployment administrative expenses
  • acquisition and dissemination of information.

Training costs include both formal and informal training costs. Vacancy costs include the net cost incurred due to increased overtime or temporary employees needed to complete the tasks of the vacant position.

How can you reduce turnover?

When turnover costs are unacceptably high, do an assessment. Find out who is leaving and why. Exit interviews can help you gain information. Then develop a retention program based on your findings.

As an award-winning employment agency serving central Texas employers since 1993, Priority Personnel can help you lower your turnover costs. Contact us today!

 

 

New Recruiting Technology and Media Trends for Central Texas Employers

November 29th, 2011

Have you seen the commercial where the guy is standing in his front door while his new 3D TV is being delivered, only to see a van drive by advertising 4D TV?

Technology – even recruiting and interviewing technology – is changing rapidly.

Until recently, job boards were the “latest and greatest” way to connect with job seekers.  The advent of social media, smart phones and free online video technology, however, has created yet another paradigm shift in the way we attract and recruit top talent.

While job boards should remain part of your recruiting mix, consider incorporating the following emerging media to remain competitive:

Remote Interviews

Online interview technology has revolutionized the hiring process.  This cost-effective tool allows you to rapidly connect with viable candidates anywhere, while greatly simplifying interviewing logistics.  Instead of spending valuable time and money on travel, you can now use services like Skype and TokBox to virtually meet applicants and determine their potential early on in the recruiting process.

Mobile Technology

According to statistics from Pew Research Center, 83 percent of Americans own cell phones.  Nearly half of them (44 percent) use their mobile devices to get access to the internet.  Leverage mobile technology to reach potential job seekers anytime, anywhere by sending text alerts about your job openings and recruiting events.  Additionally, you may want to consider making your website more “smart phone friendly,” so that it facilitates the job search and application processes.

Video

Digital video enables you to get your company’s message across like no social media tool can.  By allowing candidates to literally see and hear what the true employee experience is like, video offers a powerful way to influence and engage potential candidates:

  • Use online videos to enrich your online job postings.
  • Add video clips of your offices, production facilities, etc.
  • Interview current employees about what it’s like working for your organization.
  • Demonstrate ways you take care of your employees, work for the greater good and/or stay on the cutting edge of your industry.

To ensure your videos are viewed, add them to your homepage, job postings and social media, or use QR codes to direct job seekers to them.

Twitter

Twitter can help you contact candidates in real time by instantly broadcasting or “tweeting” available jobs.  If you have a Twitter account:

  • Search for relevant hashtags that qualified candidates might be using and integrate them into your tweets.  Tools like Search.Twitter.com, Twubs and Tagalus can help you identify hashtags your target candidates may be using.
  • Shout out new job listings.  Services like jobshouts.com and jobamatic.com allow you to automatically feed new job listings to your Twitter account.  You can even add custom prefixes and hashtags to make the content more user-friendly and searchable.

Recruiting technology will continue to evolve at a rapid pace. If, like many employers, you find this rate of change intimidating, remember that you don’t have to go it alone.

As an award-winning employment agency serving central Texas employers since 1993, Priority Personnel can help you win the war for talent.  Strategically located in San Marcos, we can provide you with the most highly-qualified and trained professionals available throughout our service area. Contact us today!

Seasonal Employees: How to Find the Best and Manage for Success

November 1st, 2011

It’s that time of year again – the holiday season.

Whether you’re in manufacturing, retail, hospitality, shipping/delivery, travel or even customer service, you can expect a significant surge in business.  Despite a flagging recovery, the National Retail Federation still predicts a holiday spending increase of 2.8%, which is slightly higher than the 10-year average.

If you anticipate requiring extra help this holiday season, it’s time to gear up.  Use this list of tips to find the best seasonal employees and get the most from them:

Find the Best

Bring back your superstars. Start by contacting your best holiday workers from last year.  If you used a staffing service last season, you can even request specific temporary employees again.  Because they’ve already proven themselves on the job, and understand your company and its workflow processes, these workers are the smartest choice.

Consider a variety of sources. If you will be recruiting on your own, cast a wide net to develop your applicant pool.  Sources of potential seasonal employees include job fairs, classified ads, online job sites, social media (Facebook, Twitter, etc.) and referrals from current employees.

Partner with a staffing service. Because they maintain databases of highly skilled candidates who are ready to work, a staffing service can quickly supply the temporary help you need to closely match your fluctuating demand.  As an added benefit, a staffing firm handles all the recruiting, interviewing and background checks you require, so you can stay focused on your most important priorities.  To get the best results, invite the staffing representative to your work location, to tour your site and develop a first-hand picture of your exact staff requirements.

Offer competitive pay. Make sure you attract top performers by paying at or above competitors’ rates.  During your busy season, you need high quality supplemental staff who can learn quickly, perform consistently and ultimately increase productivity – so it’s worth it to pay a little more for the right people.

Manage for Success

Start off on the right foot. The seasonal rush can be hard and stressful on everyone – especially workers who are new to your company.  Get everyone on your staff (direct, seasonal and/or temporary employees) together for a pre-rush kick-off to let them know how much they are appreciated.  Use this opportunity to orient and introduce new employees, wrapping up with a formal tour and review of company policies.

Provide adequate training. Although it’s time-consuming, be sure to give seasonal employees the training they need to succeed.  They may only be working for you for a short time, but their performance is no less important to your company’s success.  After an initial orientation, pair each supplemental worker with a permanent employee for practical training and support during the learning curve.  Ultimately, well-trained workers will be more independent, productive and less likely to make costly mistakes.

Closely monitor initial performance. During your busy season, you shouldn’t tolerate – and can’t afford – mediocre performance.  If a seasonal worker isn’t living up to your standards, replace him.  Staffing services provide a distinct advantage in this respect, because most offer replacement guarantees on their temporary workers.  If the assigned employee does not perform as expected within an initial time period, the staffing service will provide a replacement, free of charge.

Consider completion bonuses. Dealing with high turnover during a critical time can disrupt workflow, waste valuable time and potentially cost you customers.  Encourage seasonal workers to stay for the duration of your busy season by offering a cash incentive or gift card for completion.

Plan for Seasonal Staffing Success – This Year and Next

The holiday season is already ramping up, and Priority Personnel is ready to answer your call.  Throughout Central Texas, we deliver the light industrial, office-clerical, technical, professional and retail staff our clients need to thrive during their busiest time of year.

Successful seasonal staffing requires careful planning, so learn what you can from this year.  As you progress through the next few months, take notes on what works and what doesn’t.  Keep records of what types and how much supplemental staff you require, so you can refer to this information next year.  Mark your 2012 calendar with dates to begin recruiting early and/or meet with Priority Personnel to plan your seasonal staffing.

Top Staffing Myths and Misconceptions

August 30th, 2011

The staffing industry is not what it used to be.  In decades past, employers typically viewed staffing services as a “necessary evil” – a last resort when a low-level employee called in sick.

But not anymore.

Today’s staffing industry is comprised of diverse, robust organizations whose services can greatly enhance your company’s productivity and profitability – even in a tough economy.  Still, a significant portion of the business community doesn’t really understand what we do, or how we do it.

So if you think that staffing services are too expensive, or that you can’t find an ideal candidate through an employment agency, take a read through this quick post.  It debunks five common staffing myths:

Myth #1: Staffing firms are too expensive.

Fact: If you focus solely on bill rates and placement fees, you may conclude that staffing services are more expensive than a DIY staffing approach.  In reality, staffing firms can actually save you money.  You can leverage their recruiting expertise and economies of scale to quickly and cost-effectively access the talented candidates you need.

You can also reduce overtime, training and payroll administration expenses by using temporary employees to handle your extra workload.  Additionally, staffing experts can show you how to lower your labor costs by reducing your core staff to meet the low end of your production cycle, and then bringing in supplemental help for busier times.

Myth#2: Temps are all secretaries.

Fact: Temporary employees now work in virtually every industry and increasingly include highly skilled professionals.  In additional to administrative and industrial workers, staffing firms now regularly supply medical, technical, legal and executive-level professionals to tackle mission-critical projects.

Myth #3: You can’t hire a good employee through a staffing firm.

Fact: Staffing firms use rigorous screening, interviewing, skills testing and background / reference check processes to ensure the quality of talent they supply.  And unlike an individual you recruit on your own, a staffing service’s candidate comes with a guarantee.

Myth #4: Staffing firms only provide “temps.”

Fact:  Today’s staffing suppliers offer a wide variety of services that can be customized to suit your workforce needs, including:  temporary help, direct hire, temp-to-hire, contract staffing and payrolling services.

Myth #5: Temps are only good for “fill-ins.”

Fact: Beyond filling in for vacations or illnesses, employers regularly use temporary and contract employees to: provide extra support during busy times; staff special short-term projects; access specialized talent; evaluate talent for permanent positions.

The Truth about Priority Personnel

The truth is, Priority Personnel can certainly fill your last-minute staffing needs.  But we can do so much more for your business!  With eighteen years of experience serving Central Texas employers, we can help you use staffing to reduce overhead, complete critical projects and improve productivity.

What can Priority Personnel do for you?  Contact us today.

10 Ideas for Better Staffing Results

July 19th, 2011

Great staffing results don’t happen by accident.

They occur when smart people (like you) invest in creating the best possible relationship with a quality staffing firm (like Priority Personnel).  Don’t leave your staffing success to chance.  Use these 10 ideas to achieve better staffing results:

  1. Give temporary employees formal job descriptions. Job descriptions should be well-defined, prioritized, current and submitted in writing to your staffing firm.  They should include your expectations in terms of candidate abilities and experience, along with specific performance goals and standards.
  2. Give your staffing service as much lead-time as possible. This will optimize your chances of finding an ideal candidate for the assignment and may give you more than one suitable candidate to choose from.  And when lead-time isn’t an option, let your staffing provider know which skills and traits are most critical for the assignment.
  3. Be mindful of cut-rate deals. People – including temporary employees – are your organization’s most important asset.  They should be viewed as an investment, not an expense.  When it comes to staffing, you get what you pay for, so work with a staffing service that takes the time to fill your needs correctly.
  4. Train your staffing services representative. Educate your staffing representative on your company’s mission statement, goals, culture, history and current performance.  Tell them what types of work styles or personalities will fit best in your organization.  Familiarizing your representative with your company’s needs and preferences helps your staffing partner become a more knowledgeable extension of your human resources department.
  5. Take full advantage of your staffing vendor’s resources. Invest a little time to learn about your staffing firm’s full range of capabilities and value-added services, so you can take maximum advantage of their resources.  A good service can provide not only qualified candidates, staffing flexibility and cost savings, but staffing expertise and employee relations support as well.  To learn more about your staffing service, request a tour or a capabilities demonstration.
  6. Set clear expectations. Establish mutually agreed upon expectations for interaction with your staffing supplier at the beginning of your relationship.  This may include order-placing procedures, appropriate quality control checks and feedback methods.  Setting expectations will ensure clear communication and expedient service.
  7. Benchmark performance. Find out what tests candidates are required to take at your staffing firm.  When candidates are referred to you, ask what their test scores are.  Establish preferred scoring levels for placements within your company, using your own employees as benchmarks.  Additionally, encourage your temporary employees to take advantage of training available at the staffing firm.
  8. Provide feedback. Maintain an ongoing dialogue and honest relationship with your staffing contacts, keeping them abreast of changes in your company.  Provide feedback on their service and the performance of their temporary employees.  Meet regularly to obtain their input on what you can do to improve the quality of service and placements.
  9. Create a partner in your success. Consider involving a staffing firm in your company’s business planning.  For example, you might include your staffing representative in an annual meeting to plan staffing strategies.  Staffing experts can offer valuable insight regarding the possible uses of strategic staffing to meet your needs for workload variations, new hires and managing attrition.  They can also offer valuable market data to help you retain key employees.
  10. Reward results. High quality staffing firms focus on more than filling orders.  They want to help you save time, lower expenses and get work done.  When you find a vendor who does a great job, look for opportunities to enhance the relationship.  Invite them in.  Challenge them to help you solve problems.  See what you can do to reward their good results.  Not only will you make your top vendor happy, you’ll increase their commitment to your success.

What can Priority Personnel do for you?  Give us a call.  Together, we can explore opportunities to enhance your staffing results by:

  • identifying inefficiencies where work could be performed at a lower cost;
  • providing access to qualified and diverse candidates seeking temporary employment;
  • offering the staffing flexibility you need to stay fluid during economic challenges.

 

Finding the Right Fit: Is Values-Based Recruiting Right for Your Business?

April 19th, 2011

One of the biggest challenges facing HR and other hiring managers is finding candidates who are the “right fit” for their respective organizations.

But just what, exactly, is the “right fit”?

For many employers, it means finding a candidate who shares the same belief systems and values as the company, and who meshes with the corporate culture.  To identify this type of individual, these employers often turn to values-based recruiting.

Values-based recruiting goes beyond examining competencies and experience.  It’s about creating a values match by building a model that outlines behaviors associated with corporate values, and then assessing candidates for those behaviors.  The process typically yields hires whose thinking, values and ways of doing business closely match those of the employer.

But what if your company needs a proverbial “shot in the arm” to fuel its success – a new direction, fresh business perspective or innovative ideas to re-energize your organization?

In a case like this, the right fit for your organization will be an individual who, by definition, is not a perfect values-based match.  Rather, this candidate should be selected based on a model that outlines behaviors associated with leading your company in a new direction.  To begin this process, your company must first determine new goals, create a list of competencies and values for the available position that will support those goals, and then recruit and select accordingly.

Which type of recruiting is right for your business needs?

Priority Personnel’s recruiting experts will work with you to determine how to find the right fit for your company’s needs.  Whether you require an individual whose values closely match your company’s, or someone who will bring fresh ideas and perspective to your business, Priority Personnel will deliver candidates who exceed your expectations.  Contact us today to learn about direct hire services for San Marcos, TX employers.

Experts Look to the Staffing Industry for Signs of Recovery

April 5th, 2011

A recent Reuters article by Kristina Cooke shares some good news:

“The pace of temporary job creation after the most recent recession – an average of about 25,000 per month – has been faster than the past two, potentially a good sign for a labor market struggling with a jobless rate of 9 percent.”

This Reuters graphic of BLS data illustrates why experts look to the staffing industry for signs of recovery:

If you compare temporary employment to overall employment, you can see how the number of temporary workers declines faster heading into a recession and rises more quickly in a recovery.

In fact, research from the American Staffing Association indicates that temporary help employment is a strong coincident economic indicator when the economy is emerging from a recession.  Overall, temporary hiring rose steadily through 2010, with U.S. employers adding more than 300,000 temporary jobs (about a quarter of the 1.17 million in overall job growth last year).  Translation?  The sustained upturn in temporary staffing is good news for the economy.

But Cooke goes on to temper this enthusiasm, noting that a faster pace of temporary hiring hasn’t yet translated into significant full-time job creation – a critical piece of the recovery puzzle.  Experts such as Peter Capelli, professor at the University of Pennsylvania’s Wharton School, say that because employers are now using temporary assignments to try out potential employees on the job, the increase in temporary hiring could be masking direct hiring.

Priority Personnel – Driving the Recovery in Central Texas

As businesses throughout Central Texas begin to staff-up again, Priority Personnel is driving the recovery.  We deliver customized staffing solutions to help companies like yours achieve sustained business success in a volatile economy.  What can we do for you?  Contact Priority Personnel today.

Why Written Job Descriptions Yield Better Temporary Staffing Results

March 1st, 2011

Ever play “whisper down the lane”?

Also known as ”telephone,” this popular children’s game provides a simple, yet critical illustration of how important information can get lost in translation.

Great fun if you’re just playing around, but not so great for business.

When it comes to ordering temporary personnel, many of our clients call in their job orders.  Sure, it’s quick and convenient, but did you know that placing your order verbally is not the most effective way to work with us?

The reason is simple – verbal job descriptions can change as they’re transmitted from person to person, resulting in a “whisper down the lane” effect.  Consider, for example, how many people are potentially involved in the “lane” of communication when a job order is placed.  A department manager contacts HR with a need; HR contacts a staffing service coordinator with the order; the coordinator speaks with the staffing firm’s recruiter; the recruiter then communicates the job description to an employee.

See the potential problem?  While a verbal approach may seem easier, challenges can arise when duties get added or subtracted, or if job titles change over time.  As a result, the staffing provider may not send you the best match for the assignment.

At Priority Personnel, we highly recommend that you submit or approve a written job description to which everyone in the line (or “lane”) of communication can refer.  Doing so will eliminate miscommunications, misunderstandings and confusion, and ensure that you get the best employee for the assignment.

Improve your temporary staffing success by working with Priority Personnel, your Central Texas staffing service.

New Technology in Human Resources – Striking a Balance Between IT and the Human Touch

February 1st, 2011

Has technology taken the ‘human’ out of Human Resources?

The Society for Human Resource Management (SHRM) recently published a report on technology trends in the sector, and the overall conclusion was unsurprising:  today’s HR departments leverage IT to benefit almost every aspect of their daily operations.

Continual technology improvements, coupled with declining costs, has fueled a surge in HR’s usage of technology:

  • Software is being deployed to manage areas such as internal mobility, appraisal management, succession planning and personal development.
  • E-recruitment and performance management software are dramatically improving HR’s ability to effectively execute PRM (people relationship management) and further solidify their organizations’ employer brands.
  • Applicant tracking and hiring management systems are streamlining processes and driving down costs.

But will this IT success come at a price for some HR organizations?  While technology can reduce the administrative burden associated with HR and enable them to focus on more strategic issues, HR will always be about people management – which requires human interaction and face-to-face contact.  As a result, HR organizations should attempt to strike a balance between systems and the human element.

As Jeff Phelps, President of WorkforceLogic/ABE Services says, “We can’t ever begin to think of treating people like equipment or some sort of inanimate commodity…The best of all worlds is a holistic solution that combines technology with the human element to facilitate putting the right person in the right job at the right time.”

HR technologies making the biggest impact:

  • Employee self-service
  • Workflow technologies
  • Vendor management systems
  • Applicant tracking systems
  • Hiring management systems
  • E-recruitment software

Learn more.

Find out more about the evolution of IT in HR, as well as key findings from the SHRM’s HR technology survey, by following this link to the HR Management article “Technology aids the human touch.”

When it comes to staffing your business effectively, both IT and the human touch are critical.  Priority Personnel leverages state-of-the-art technologies with distinctly personal service to deliver customized solutions that maximize your staffing ROI.  Contact us today to learn more about our staffing solutions for San Marcos, Texas employers.

Strategic Workforce Management for Central Texas Employers

January 18th, 2011

What is strategic staffing, and what can it do for your organization?

Many of our clients enjoy the benefits of our temporary staffing services for last-minute and short-term staffing requirements.  But depending upon your unique workforce needs, one of Priority Personnel’s strategic workforce solutions may be the right choice to help your company stay flexible, competitive and efficient.

Here is a quick overview of our services and what they can do for you:

Planned / Just-in-Time Staffing:  Regular, planned use of temporaries to handle your peak production periods, seasonal activities or special projects.  Our staffing experts will help you analyze your workload throughout the year and determine the right times to bring in supplemental staff.  Together, we can develop a proactive staffing plan that saves you money and minimizes your need for layoffs by supplementing your core workforce with temporary help during your busiest periods. 

Find out how Priority Personnel helped a manufacturing client use planned staffing to reduce costs, while effectively managing their busiest season.

On-Site Staffing:  If you have high-volume staffing needs, Priority Personnel can provide a staffing manager to work on-site, directly at your location.  Your on-site coordinator will handle every facet of coordinating, ordering, planning and tracking of contingent employees.  Because the on-site coordinator acts as the central contact for hiring managers, coordinates recruiting activities and handles personnel-related issues, you are free to focus on your most important priorities.

Find out how Priority Personnel helped a manufacturing client use an on-site coordinator to simplify staffing and give more time back to HR.

Managed Staffing:  The staffing service assumes responsibility and accountability for your entire staffing function, from hiring and recruiting to managing temporary employees.  Managed staffing services provide the convenience of having a single source for all your staffing requirements.  It eliminates the most time-consuming and frustrating parts of hiring, delivers the best candidates available, improves efficiency and reduces your staffing costs.

Priority Personnel – Your Organization’s Key to Strategic Staffing Success

As a leading San Marcos staffing firm, Priority Personnel can do much more than provide great workers for your short-term needs.  Our staffing professionals can help you critically examine your workforce needs, and develop a staffing strategy that makes your organization more successful.  Call us today to schedule a free workforce consultation.